A borrower may have all or part of his or her loan (including interest) canceled for engaging in teaching, public service, service in the Peace Corps or ACTION, or service in the military.
The Higher Education Act was amended to extend all service cancellations to all Perkins, NDSL, and Defense Loan borrowers who were previously ineligible as of October 7, 1998. However, only periods of qualifying service performed on or after October 7, 1998, are eligible for cancellation benefits if the borrower was not previously eligible due to the date the loan was made.
Please Note: If you have a Direct or FFEL Stafford Loan, please see the Department of Education's web site at US Dept. of Ed. Stafford Loan Teacher Cancellation for information on a teacher cancellation for loans received on or after October 7, 1998 by a borrower with no outstanding loan balance as of that date.
Cancellations
The following cancellation application procedures apply to any loan under this program.
The borrower applies for cancellation of his or her loan by obtaining the appropriate cancellation form from the student loan office of the school that made the loan. View all Southern Utah University forms.
The borrower submits the form to the school, along with any supporting documentation the school requests, by the deadline the school establishes. Schools determine, based on the borrower's documentation, whether the borrower is entitled to have any portion of his or her loans canceled. This responsibility cannot be delegated.
- Full-time teaching in a field of expertise such as mathematics, science, foreign languages, bilingual education or other fields where the State education agency determines there is a shortage of qualified teachers;
- Full-time teaching in the field of special education;
- Full-time teaching in a school classified by the Department of Education as a low-income school eligible under the Chapter 1 of the Education Consolidation and improvement Act of 1981, see the Department of Education website to see if your school is eligible at the following link:
U. S. Department of Education Low-Income School Listing- Full-time employment as a state licensed nurse or medical technician providing health care services;
- Full-time employment in a public or private nonprofit child or family service agency providing or supervising the provision of services to high-risk children from low-income communities and families of such children;
- Full-time employment as a qualified professional provider of early intervention services in a public or other nonprofit program under public supervision by the lead agency as authorized in Sect. 676(b)(9) of the Individuals with Disabilities Education Act;
- Volunteer service in the Peace Corps Act or Domestic Volunteer Service Act of 1973 (VISTA);
- Employment as a law enforcement or corrections officer in an eligible local, state, or federal agency which is publicly funded and if its principals activities pertain to crime prevention, control or reduction of enforcement of criminal law, and principal responsibilities are unique to the criminal justice system; or
- Full-time educational staff member in a pre-school program carried out under the Head Start Act.
Cancellation Rates
With the exception of cancellations for Head Start, military, and volunteer service, the cancellation rate per completed academic year of full-time teaching or for each year of otherwise qualifying full-time service is:
- 15% of the original principal loan amount-plus the interest that accrued during the year-for each of the first and second years;
- 20% of the original principal loan amount-plus the interest that accrued during the year-for each of the third and fourth years; and
- 30% of the original principal loan amount-plus any interest that accrued during the year-for the fifth year. For cancellation rates for Head Start, military, and volunteer service.
Concurrent Deferment
Schools must automatically defer loans during periods of service for which schools also grant loan cancellation. Borrowers do not need to apply for these automatic deferments.
Payment Refund
Schools may not refund payments made during a period for which the borrower qualified for a cancellation, unless the borrower made the payment because of the school’s error.
Defaulted Loans
A school may cancel a defaulted loan if the only reason for the default was the borrower’s failure to file a cancellation request on time.If the loan has already been accelerated, only eligible service performed prior to the date of acceleration can be considered for cancellation. A borrower is not entitled to cancellation for any eligible service performed after the date of acceleration.
Service Cancellations
Teaching Cancellations
Schools may cancel up to 100% of a Perkins Loan if the borrower has served full time in a public or non-profit elementary or secondary school system as a:
- teacher in a school serving students from low-income families;
- special-education teacher, including teachers of infants, toddlers, children, or youth with disabilities; or
- teacher in the fields of mathematics, science, foreign languages, or bilingual education or in any other field of expertise that is determined by a state education agency to have a shortage of qualified teachers in that state.
Other Service Cancellations
Schools may cancel up to 100% of a Perkins Loan if the borrower has served full time as a:
Nurse or Medical Technician Cancellation
- nurse or medical technician providing health care services;
Child or Family Services Cancellation
- employee of an eligible public or private nonprofit child or family service agency who is providing or supervising the provision of services to both high-risk children who are from low-income communities and the families of such children;
Early Intervention Cancellation
- qualified professional provider of early intervention services in a public or other nonprofit program under public supervision;
Head Start Cancellation
- staff member in the educational part of a preschool program carried out under the Head Start Act; or
Law Enforcement or Corrections Officer Cancellation
- qualifying law enforcement or corrections officer.
Military Service Cancellations
Schools may cancel up to 50% of a Perkins Loan if the borrower has served a period of full-time active duty in the armed forces (that is, the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard,) the National Guard, or the Reserves. The service must be in an area of hostilities or an area of imminent danger that qualifies for special pay under Section 310 of Title 37 of the U.S. Code. The cancellation rate for every complete year of qualifying service is 12.5% of the original principal loan amount plus any interest that accrued during the year.
Volunteer Service Cancellation
Schools may cancel up to 70% of a Perkins Loan if the borrower has served as a Peace Corps or ACTION (under Title I, Part A of the Domestic Volunteer Service Act of 1973) volunteer.
- 15% of the original principal loan amountplus any interest that accrued during the yearfor each of the first and second 12-month periods of service; and
- 20% of the original principal loan amountplus any interest that accrued during the yearfor each of the third and fourth 12-month periods of service.
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